CBE Research Seminar Series: Exchange Rate Variability and Optimum Currency Area Theory: Evidence from Post-Soviet Countries

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YEREVAN, Armenia – On April 6th, the American University of Armenia (AUA) College of Business & Economics (CBE) organized a presentation led by Assistant Professors Gayane Barseghyan and Vardan Baghdasaryan, on their research about exchange rate variability and optimum currency area theory applied to post-Soviet countries (with more emphasis in the South Caucus region). The lecture was a part of the CBE Research Seminar Series aimed to host faculty presentations on their research findings, create a more vibrant research environment, and promote scientific collaboration among the AUA faculty.

In their research, Gayane Barseghyan and Vardan Baghdasaryan apply theory of optimum currency area to post Soviet and other selected countries in order to evaluate perspectives and comparisons of common currency area. Exchange rate variability is found to be significantly driven, among others, by trade linkages and the inflation differential. However, the variability of bilateral exchange rate is largely explained by the average variability of each country’s currency against the US dollar, and at the same time, considering the Russian ruble as an anchor currency they assess the readiness of countries for monetary unification. Preliminary results suggest that although Armenia is a member of the Eurasian Economic Union (EEU), the readiness to adopt common currency does not differ from other countries of South Caucasus.

Gayane Barseghyan is an Assistant Professor at the CBE. She joined the AUA as a full-time faculty member in 2015. Prior to joining AUA, Dr. Barseghyan was a senior economist at the Central Bank of Armenia. She has received her PhD in Economics from Yerevan State University in 2013. She teaches Microeconomic Theory, Macroeconomic Theory, Monetary Policy and Financial Markets. Her current research interests are largely in the area of macroeconomics.

Vardan Baghdasaryan is an Assistant Professor at the American University of Armenia. Prior to AUA, he was the senior consultant in a local consulting firm specialized in technical assistance advisory services to international donor organizations, and deputy director of the Center of European Studies (EU funded project). More recent consulting projects include the contribution to development of the Armenia Development Strategy (ADS), assistance to tax code development and analysis of redistribution tax policies, and public financial management reforms. His research interests lie in the field of political economy and development economics.

Founded in 1991, the American University of Armenia (AUA) is a private, independent university located in Yerevan, Armenia and affiliated with the University of California. AUA provides US-style education in Armenia and the region, offering high-quality, graduate and undergraduate studies, encouraging civic engagement, and promoting public service and democratic values.